Short Sale After Chapter 7 Discharge?

[atxlivin]

Chapter 7 was discharged in September 2009 and we included our home in the bankruptcy. We moved out of the house in August 2009 to a rental.

House was listed with a realtor starting in May 2009 and apparently the realtor kept working our lender, SunTrust, for a short sale.

Well SunTrust just approved a short sale and want me to sign paperwork agreeing to this.

Should I do this? Is there any benefit for me? Or should I just let it go to foreclosure?

They did say they would forgive any debt owed but I could be liable for taxes on same.

Any thoughts?

[StartingOver08]

Sounds like the best of both worlds, you surrendered the property in the BK so you are not personally liable for debt AND you have a successful short sale negotiated with the lender so you don't have to wait forever for the lender to continue to foreclose on it. That means the deed will transfer to the new buyer with the sale much quicker than if you wait for the foreclosure, which is your other alternative. Congratulations!

BTW the tax issue they mention is a disclosure and will not apply to you most likely because of your BK. Check with a tax professional anyway.

[Duke89]

Talk to your attorney before signing anything. If you surrendered the house as part of your bankruptcy filing then I would think there should be no more involvement on your part. I would not touch this with a ten foot pole. It sounds to me like the bank it trying to avoid having to go through the legal process of foreclosing on the property so that they can have your name removed from the deed and then short sale it (at a price higher than what they might get at auction). I would not sign a thing.

[HHM]

Very carefully review anything before you sign it. Many of these short sale agreements have boilerplate language regarding tax issues, continued responsibility for the debt etc. The agreements were not originally designed with a seller who had already filed BK and discharged her personal responsibility. You just need to make sure you are not accidentally reviving a debt.